How to achieve organizational ambidexterity

Organizational ambidexterity is the ability to balance exploration and exploitation, innovation and efficiency, creativity and discipline. It is a crucial skill for any organization that wants to thrive in a digital age, where change is constant and disruption is inevitable.

But how can you achieve organizational ambidexterity in a practical way? How can you foster a culture of learning and experimentation, while also maintaining operational excellence? How can you leverage digital technologies to enable both sides of the ambidexterity equation? In this article, I will walk you through some of the fundamentals of achieving ambidexterity in your organization.

But to start off, let’s define what exactly ambidexterity is:

Ambidexterity is an organizations ability to simultaneously pursue both incremental and discontinuous innovation and change that results from hosting multiple contradictory structures, processes, and cultures within the same firm.

So, let's try to boil it down a bit. Organizational ambidexterity is a firm that successfully both can exploit and explore its existing resource base. An example of that could be Amazon, a firm that has been able to exploit its core e-commerce business while also exploring new domains such as cloud computing, AI, and smart devices.

But why is it important for businesses to become ambidextrous?

Traditionally, ambidexterity was considered to have adverse effects on firm performance. However, it has over time been shown that it definitely is possible for firms to engage in conflicting activities at the same time and still outperform a firm’s competitors, as with the case of Amazon for example.

It is important for businesses to be ambidextrous because it enables them to achieve both short-term and long-term success in a dynamic and competitive environment. By exploiting their existing products and markets, they can optimize their operations, improve their profitability, and satisfy their current customers.

By exploring new opportunities and innovations, they can create new sources of value, differentiate themselves from competitors, and anticipate future customer needs. Ambidexterity also helps businesses to avoid complacency, inertia, and obsolescence, which can undermine their performance and survival.

3 different types of organizational ambidexterity

1. Sequential ambidexterity captures the idea that firms adjust organizational structures over time to accommodate for conflicting alignments.

By alternating between exploitation and exploration over time, you can adapt to changing environments and achieve long-term success. However, sequential ambidexterity also has some drawbacks. It can be challenging to decide when to switch between strategies, how to allocate resources, and how to manage the tensions and conflicts that may arise.

2. Structural ambidexterity is a concept that describes how businesses can create separate units or structures for different types of activities. Structural ambidexterity means that businesses can assign different units to focus on either improving their current products and markets (exploitation) or developing new ones (exploration), with different goals, resources, and cultures.

Structural ambidexterity can help businesses to avoid the conflicts and trade-offs between exploitation and exploration, and to leverage the synergies and learning across units. However, structural ambidexterity also has some drawbacks. It can be costly and complex to maintain separate units, it can create coordination and communication challenges, and it can reduce the flexibility and responsiveness of the units to environmental changes.

3. Contextual ambidexterity means that businesses can empower their employees to use their own judgement and initiative to balance improving their current products and markets (exploitation) and developing new ones (exploration) in their daily work, without creating separate units or structures. Contextual ambidexterity can help businesses to foster a culture of innovation, learning, and adaptation, and to leverage the diversity and creativity of their employees.

However, with contextual ambidexterity it can be difficult to establish and maintain a suitable context, it can create role ambiguity and stress for employees, and it can reduce the efficiency and coordination of the activities.

Ambidexterity in one way or another definitely seems the way to go for firms who want to remain relevant and keep performing. So how can you initiate it in your organization?

Three ways to initiate ambidexterity

1. Staffing

• Hire dedicated managers who can drive changes across the organization and lead digital technology initiatives. For example, you can create roles such as CIO/CTO/CDO to oversee innovation and transformation projects.

2. Designing

• Build separate units that are tasked with non-routine work, experimentation, and exploration of new business opportunities. This approach seeks to implement structural ambidexterity by creating a new team/department/business unit that focuses on exploration, while the rest of the organization focuses on exploitation. The challenge is to enable an effective interface and alignment between the separated units.

3. Developing

• Change the practices by which you develop and maintain technology. Here, you can use agile methodology to work across teams and functions, design, implement, and re-evaluate outcomes and change course if necessary. This approach seeks to implement contextual ambidexterity by creating a flexible and supportive context that enables individuals and teams to balance exploitation and exploration in their daily work.

It’s important to note that the above-mentioned are not mutually exclusive, meaning that any number of them can co-exist in organizations.

To sum up, ambidexterity is a vital skill for businesses that want to survive and thrive in today’s complex and uncertain world. By balancing exploitation and exploration, you can optimize your current performance and prepare for future opportunities.